OnLive - Gaming on the Cloud

So I saw this one coming about 12 years ago. Really, anyone who understands Moore's Law and economies of scale should have. At the time everyone I tried to explain this to thought I was crazy - remember, this was the age of the 28.8, nobody could conceive of full speed high-res streaming video and virtually no latency. OnLive, if you haven't heard, is a gaming service wherein all the demanding parts of the game are managed on the cloud; A.I, graphics, everything is done by remote servers which stream the audio and video to you over the internet. This means virtually any PC or television in a home with a high-bandwidth internet connection can play any game any time, no special hardware required.

I don't know if the timing is right, but I believe that within 10 years this will be the gold standard for all rich media services. Think about it: if you're a gamer you probably spend on average 300-500 dollars per year on hardware between console upgrades and gaming hardware for your PC. Given the rapid depreciation rate of that hardware and the fact that you only use it 10-20% of the time it spends in your house, this just doesn't make any sense. That's not to mention the hassle of upgrades, patches, driver updates, operating system issues, viruses, and the competing needs of other members of the household. If you were just renting time on the same hardware pro-rated by the hour you'd cut your hardware costs to 30-100 dollars per year and probably save a good 100 or more hours in headaches. That is exactly the value proposition that is going to make OnLive, or a service like it, wildly successful in the next decade.

There are a few implications to this that should be considered. One is the fact that the standard 250gb/month bandwidth cap that the major ISPs have been claiming is more than sufficient for the foreseeable future is right out the door. Without revealing the math, this service alone is going to require around 200gb/month for your average gamer. Innovations like this are also going to drive consumer demand for network neutrality, as nobody wants to be stuck with the internet provider who isn't getting payed off by their rich media service of choice for preferred bandwidth. Imagine for instance moving from one town to another and finding out that your ISP doesn't consider OnLive a 'preferred' service and thus doesn't allow it to run on their full advertised bandwidth. This is a situation where the power is going to end up in the hands of the consumer, who will demand maximum choice with minimum hassle.

We'll see how it plays out. I wish OnLive and everyone like them the best of luck; I'll definitely be a customer.